Post by Trade facilitator on Jan 7, 2017 22:57:25 GMT 1
Given the emerging realization that oil prices would remain volatile amid a global
economy that is experiencing weak recovery, Nigeria can sustainably boost output and
achieve economic stability by merely deploying counter-cyclical fiscal tools. With this
awareness, the Nigerian government would have taken the wrong policy decision if it
had cut capital expenditure and skimped on social investment because of low revenue
from the oil sector. This would have been a recipe for hampering long-term growth and
directly hurting the masses.
It is common knowledge that fiscal policy in any oil-producing developing countries is
historically procyclical. Government expenditure, investment and consumption, having
been lifted by high commodity prices, are left crashing during sustained dip in the
prices. Therefore, the end of the commodity ``super-cycle’’ has left Nigeria in the grip of
prolonged fiscal imbalances.
However, the president has responded to Nigeria’s fiscal challenges by not taking the
intuitive approach. By increasing the federal budget and pursuing increased investment
in capital expenditure, the government is poised to decorrelate commodity prices,
investment and output growth. Capital expenditure was increased to unlock the output
growth that is shut-in by major swings in oil prices and finally put Nigeria on the path of
structural transformation.
Although, the current countervailing realities including the difficulty in raising the
required financing for the budget might create doubts as to the effectiveness of this
strategy for a while. But at the end the strategy will prove decisive. Increasing capital
investment in infrastructure will spur private participation in the broader non-oil
sectors, especially agricultural commodities. This strategy should also inspire confidence
in the long term growth of export business in the Nigerian economy by both Nigerian
and the international community
Nigerians has also been informed that plans for over 40 capital projects spanning roads
to enhance movement of non-oil commodities across the length and breath of the
country, railways, aviation, power, agriculture, housing, water, education and health in
the various geo-political zones of the country are underway. In addition to targeted
social investments, this aligns with recent trends in national investment policies that will
attract Foreign Direct Investment (FDI) to non-oil sectors of the economy.
Are there therefore policy choice that Nigerians can apply or deploy to disentangle the
negative correlation between declining output and fiscal imbalance caused by low oil
revenue? The answer is a capital yes. Attracting more investment into the non-oil
sectors of the Nigerian economy will offset the current decline in the total output and
avoid the looming stagflation, a phenomenon caused by a combination of rising inflation
slower real economic growth, and a tight job market
However, Nigerians needs to increase their knowledge in the international trade in the
non- oil exportable/agricultural commodities, stock of FDI in international
transportation, infrastructure, power, communication and services. Data for the year
2015 as provided by a reputable analyst shows that between 2013 and 2015, Nigerian
service provider sector of our economy attracted about 35 billion dollar or 40 percent of
the country’s total stock in that period. This is largely attributable to the liberalization of
the telecoms and the banking sectors.
The failures recorded by those leaders are considerable clear and absolute. They are not
made less severe by any measurement or relative determination. That is not to say that
both leaders has no achievements at all but we must recommend their fundamental
failures. Most importantly, we need to define a moral LCD to guide the election of the
next president who will be prepared and ready to deliver on comprehensive common
good for Nigerians. However, President Burahi has an advantage of about 2 ½ years to
turn around his performance. Perhaps, he will utilize this opportunity of time to his
advantage.
SO WHAT IF IT’S A NEW YEAR?
On same January 2009, the above was the tittleof a column in one of our national
dailies. Taking an inventory of the development in the export business in Nigeria since
then, it is definitely not impressive and we at The Thy Global Investment Limited are
poised to ask ourselves again over and over, perhaps with slight frown on our faces:
So what if it’s a new year?
I am not a sadist, but if there is the need for us to knock ourselves so hard, lets do so
without further consideration for issue of individualism, to enable us catch-up with the
rest of the progressive and glorious world in a business that few of us know how to fix
and fix for others.
Indeed, the year 2016 has aroused a sober reflection in all sectors of the Nigerian
economy, including the export category such that, the boys are gradually being
separated from the men. At least we can conveniently take indices from the conscious
efforts of our company, The Thy Global Investment Limited that has strived relentlessly
at educating willing members of the public through regular semina/workshops and
outright trainings on export, snail farming, exportation of various agricultural
commodities and many more. Beyond these, there is a general problem of whether we
can beat our chest and say we have met the status of our set goals especially at it affects
export business.
There appears to be so much pretence, so much attachment to foreign goods and
services, idolization of foreign materials and services has rely hit deep into our daily
reasoning, and unless urgent steps is taken to reverse our thinking and behaviours
towards imported materials, especially during our various yearly activities, fanfare,
singing of new dawn; the splendor of our respective religion activities, the glamour of
January 1 and the momentary sober engendered new year habits, we might not be able
to get to our destination in good time.
What is the use of quantum without excellence? What is the pride of a farmer who
sweats to sow, but harvest with ease; or why would anyone work like elephant and eat
like an ant?
No doubt, Nigeria is still lacking in proper structures, it is difficult to see ourselves as an
industry and if we must say the truth, any economy that is not embedded in the basic
industrialization and exportation principles cannot stand the test of time. It will only be
like a structure enacted on a weak foundation. Nigeria needs to be rediscovered to be
able to continue to yield her much needed benefit required for the national treasury;
how much employment it can create; how much foreign recognition and respect it can
achieve as a tool for the country’s development.
